British Airways will launch a new low-cost airline, attacking the European market

British Airways will set up a new low-cost airline to attack the European market

British Airways is planning to launch a new low-cost short-haul airline to compete with Ryanair and EasyJet.

A British Airways Airbus A380 prepares to land at Heathrow Airport. Photo: AFP

The European aviation industry is making a strong recovery from the Covid-19 pandemic. In a notice to employees posted by travel website, British Airways chief executive Sean Doyle said the airline was planning to bring a “new operational subsidiary” to the network. The airline’s existing long-haul network is at Gatwick – London’s second largest airport.

British Airways CEO It added that the new airline would specialize in “highly competitive” short-haul flights from Gatwick Airport from the summer of 2022.

A British Airways spokesman told CNN the airline was working with labor organizations “on proposals fly short stop at Gatwick Airport”, but declined to comment further.

This is not British Airways’ first shot at developing an airline specializing in short-haul flights to Europe. In fact, in 1998, British Airways launched the low-cost airline Go Fly, which operates short-range flights from London’s Stansted Airport to many destinations throughout the “old continent”. But four years later, Go Fly was acquired by rival EasyJet – the largest airline operating out of Gatwick.

The establishment of an airline short range The new low fares could be crucial for the world’s third-largest airline group IAG – British Airways’ parent company – as the group has suffered huge losses over the past 18 months as its overall airline business has been hit. pandemic collapses.

IAG Group posted a pre-tax loss of 2.3 billion euros ($2.7 billion) in the first half of this year as demand for air travel remained low. In particular, British Airways “contributed” the largest to IAG’s loss, because transatlantic routes – which were the “golden eggs” of British airlines – were limited due to the epidemic.

While IAG Group is recovering from a large loss, rival airlines Ryanair and EasyJet are estimated to recover from 60-80% of passengers compared to pre-pandemic levels in the third quarter, significantly higher than compared to the previous quarter. with the IAG’s 45% target.

The British Airline Pilots Association (BALPA) has confirmed that it is in the final stages of negotiations with British Airways about adjusting the salary and working conditions for the new airline’s pilots.

British Airline Pilots Association general secretary Martin Chalk said the association “cautiously welcomes” British Airways’ decision to restart short-haul flights. A representative of the British Airline Pilots Association assessed that this move of British Airways would “create a number of necessary new jobs for pilots”.

Negotiations between British Airline Pilots Association and British Airways about pilot salaries takes place in the context of the UK government extending the implementation of the Covid-19 Job Retention Program until September 30. This causes IAG Group to worry about increased operating costs due to high wages.

Under the Covid-19 Job Retention Scheme, the UK government will pay 60% of wages and a maximum of £1,875 for hours worked during which workers are on leave. Employers must compensate workers to ensure workers receive 80 per cent of wages (up to £2,500) for the hours they take leave.